Fire crews put out embers in a building at the Nauru detention centre in late July.

Supplied: Department of Immigration and Citizenship

Refugee advocates are concerned for the safety of asylum seekers in Nauru after large-scale riots at the island's detention centre late last month.

Yesterday, Prime Minister Kevin Rudd signed a deal with Nauru's president that will see asylum seekers who arrive by boat in Australia sent to Nauru to have their claims processed and possibly resettle there.

The deal, which is similar to the one struck recently with Papua New Guinea, comes just a fortnight after asylum seekers being held on Nauru rioted, causing $60 million in damage to the facilities.

The latest announcement is part of the Federal Government's plan to ensure no asylum seeker who arrives in Australia by boat will be resettled in Australia.

Key points:

Australia, Nauru strike deal that will see asylum seekers processed and refugees resettled in Nauru

Number of refugees to be resettled in Nauru up to the country's government

Rudd says it is a similar deal to the one struck with Papua New Guinea

Australia to spend almost $30 million on aid in Nauru in 2013-2014

Rudd does not reveal election date

No single males will be resettled in Nauru

But refugee advocates say they are worried about hostility towards asylum seekers on Nauru.

Asylum Seeker Resource Centre spokeswoman Pamela Curr says she has received reports about the local people's negative stance on asylum seekers who are currently on Nauru in the wake of the destructive riots.

"There is a tremendous antipathy toward the asylum seekers, such that they will never be allowed out to roam freely on the island," she said.

"Our politicians keep saying 'it's not a detention centre, they will have freedom of movement'. That is rubbish.

"They couldn't let the asylum seekers out in Nauru for their own safety."

Resettlement in Nauru a joke, refugee advocate says

Other refugee advocates have labelled the Federal Government's asylum seeker deal with Nauru as cruel and absurd.

Refugee Action Coalition spokesman Ian Rintoul says Nauru is already struggling with high unemployment and will not cope with an influx of refugees.

"Nauru is not capable of providing any form of sensible resettlement," he said.

"You know, 40-odd per cent [of people] are unemployed, [it has] a housing crisis of its own, the money that the government is meant to use for the welfare of the Nauruan people is running out.

"The idea that Nauru could resettle refugees is just beyond a joke.

"Nauruan politicians don't stay on Nauru mostly, they find themselves houses in Australia and that's exactly what should happen with refugees, they should be brought to Australia."

Human rights lawyer and friend of Mr Rudd, Father Frank Brennan, has accused Labor of engaging in a "race to the bottom" on asylum seekers.

Father Brennan says the deal is clearly designed to appease voters in western Sydney ahead of the election.

"There'll be no children sent to Nauru under this scheme before an election, so obviously it's designed for consumption in western Sydney and not in the streets of Indonesia, where people are waiting to get on boats," he told ABC News 24.

Greens leader rubbishes resettlement plan

Greens leader Christine Milne says the Government is simply bribing its poorest neighbours.

"Out of sight, out of mind. Outsource the cruelty we want to impose on people and put it on you," she said.

"Is he (Mr Rudd) expecting a country like Nauru to be able to resettle families when they don't produce their own food, when there are virtually no jobs for people to go to when the education services are minimal.

"Realistically this will fall in a heap the minute you have a look at the logistics."

The Government will provide financial support to Nauru as part of the arrangement.

The Federal Government says there may be more resettlement deals with regional neighbours.